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SCORE-ing big! How a cooperative approach to improved work conditions in SMEs can increase productivity

Gao Yun, Representative of the ETI Office for South East Asia and Michael Elkin, Chief Technical Advisor of the ILO SCORE Programme

Improving SMEs workplace practices can help them achieve better productivity. The ILO’s SCORE Training programme is helping companies in China improve work conditions, and participants say it is working.

Small and medium enterprises (SMEs) make up 60 per cent of China’s national industrial output and create nearly 80 per cent of jobs.

They also tend to have lower levels of compliance with national labour laws – such as unregulated or excessive work hours or failure to adhere to legal wage rates and benefits – strained industrial relations, inadequate safety, and a lack of health protection for workers. And this can result in lower productivity.

So, how can SMEs engage in a global marketplace while facing increasing price competition and growing expectations from customers to provide improved working conditions?

We know there is a positive association between good workplace practices and positive enterprise-level outcomes including: decreased staff turnover, improved profitability and greater customer satisfaction. And ILO’s Sustaining Competitive and Responsible Enterprises (SCORE) Programme has clearly shown training can help achieve this – contrary to misconceptions that formal training for smaller enterprises is less tailored and more expensive, and the disruption to work is costly.

China first engaged with the SCORE Programme in 2009, initially working with the China Enterprise Confederation (CEC) in Liaoning, Chongqing, Sichuan, Zhejiang and Shanghai, to target sectors such as manufacturing of machines, auto parts and garments.

In March 2017, the ILO launched a new project to improve the productivity and working conditions in Guangzhou City, Guangdong Province, and Shanghai, under the SCORE Programme, in partnership with the UK based Ethical Trading Initiative (ETI), an alliance of companies, trade unions and NGOs that promotes respect for workers’ rights around the globe. This time, the project targets buyers rather than SME networks, setting a path toward ethical production from the top.

ETI members are participating in the joint project and sponsoring SCORE Training for their suppliers in China. These members include Boden, Inditex, Matrix, Mothercare, New Look, Orsay, Regatta and White Stuff, and represent a cross-section of the industries represented in the region, including: garments, sporting goods, shoes and handbags.

The ILO-ETI collaboration allowed for the provision of SCORE Training to 17 factories, suppliers to ETI members.

SCORE Training emphasizes the importance of closely involving the workforce, and building cooperation with management to support initiatives aimed at improving enterprise performance.

It also places an emphasis on establishing sustainable management systems to ensure that the good practices continue after training concludes.

SMEs – which have high job creation potential, but often also significant decent work deficits – are the ultimate beneficiaries. And, in fostering cooperation, SCORE Training contributes to economic and social development as well as poverty reduction. It helps create a win/win situation.

After only 6 months, we are already receiving positive feedback from participants. One HR manager commented, “Before, workers and supervisors in the factory didn’t understand each other, they were not willing to cooperate on improvements. The SCORE Training has encouraged workers to participate, and only one month after the training, our workshop is already changing and has made great improvements. Workers have changed from passive implementation to active execution”.

SCORE Training, guided by an accredited SCORE trainer demonstrates best international practice in the manufacturing and service sectors.

The five SCORE Training modules cover:

Workplace Cooperation;

Quality Management;

Clean Production;

Human Resource Management;

Occupational Safety and Health.

Each module includes a two-day classroom training for managers and workers, followed by on-site consultations with industry experts that help put the training into action in the workplace.

The ILO/ETI initiative is co-funded by develoPPP.de, a German Federal Ministry for Economic Cooperation and Development (BMZ) programme which helps German and European enterprises run long-term projects that combine business practices and development policy targets.

In addition to this partnership, ILO assists government agencies, training providers, industry associations and trade unions in emerging economies in Africa, Asia and Latin America to offer SCORE Training to SMEs.

The ILO SCORE Programme will enter its final and third Phase in November 2017, with funding until October 2021.